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iECONOMICS Blog – Economics News & Reference

Oil is an important factor of production. Due to her lack of natural resources, Singapore depends on imported oil in her domestic production processes. So, how has the fall in oil prices affected Singapore? Simply put across, a fall in the price of oil will lead to a fall in the domestic cost of production. When this happens, firms will increase their production, leading to an increase in the economy's Short-run Aggregate Supply (SRAS), and a fall in the General Price Level (GPL) in the country, hence dampening inflationary pressures in the country. Furthermore, when firms increase their production, they will require more factor inputs like workers, hence this will lead to an increase in the derived demand for labour, thereby reducing unemployment in the country. Of course, the above is only one of the many consequences the fall in oil prices have had on Singapore.
Most students are able to think of some consequences brought about by the plunge in oil prices. However, most of them do not completely understand what
have caused that to happen. Such knowledge is of key importance in helping students see a complete picture of this global issue. Thus, we are sharing this video so that students can gain a better insight into what have caused the fall in the global prices of oil.

For students that have been struggling and trying to understand how the European Debt Crisis came about, watch this simple video for a clear illustration on what it is about, and what have caused it to happen!
Now that you've gained a better understanding of how the European Debt Crisis came about, take the challenge one step further by asking yourself, "How would this debt crisis affect other countries in the world, like the United States, Russia and Singapore?", "How would this affect the Standards of Living of their trading partners?"
Hint: It can be understood using knowledge from the "Balance of Payment" topic. Drop a Whatsapp / SMS to 9732 9931 for a deeper discussion on the above! We are more than happy to answer your questions!

Trade Deficit - Why is it a problem?
October 15, 2016
This is a useful video for students that find the topic International Trade challenging.
AD = C + I + G + (X-M)
When the import expenditure of a country exceeds the export revenue, a trade deficit occurs.
As a result of a fall in the (X-M), i.e the net export revenue, there will be a fall in an economy's Aggregate Demand (AD). Eventually, the economy will experience a fall in the Real National Income, and a slow/negative economic growth. Firms will also find that they are unable to sell off all their goods, and thereby reduce production. This will cause a fall in the derived demand for labour, causing demand-deficient (cyclical) unemployment in the country to rise.
There are many more negative consequences of a trade deficit. Watch the video to find out more!

Effective practice, which requires intense focus, is the best way to achieve new heights and maximise your potential. "In a study, researchers found that students were on average only able to focus for 6mins straight". Thus, to all students out there aiming for greater heights, do rmb to switch off all forms of distraction, keep your mobile phone away, and focus on your task at hand!